In the United States from the late 18th and 19th centuries, the Industrial Revolution affected the U.S. economy, progressing it from manual labor, farm labor and handicraft work to a greater degree of industrialization based on wage labour. There were many improvements in technology and manufacturing fundamentals with results that greatly improved overall production and economic growth in the U.S.
The Industrial Revolution occurred in two distinct phases: the First Industrial Revolution occurred during the later part of the 18th century through the first half of the 19th century and the Second Industrial Revolution advanced following the American Civil War. Among the main contributors to the First Industrial Revolution were Samuel Slater's introduction of British industrial methods in textile manufacturing to the United States, Eli Whitney's invention of the cotton gin, Éleuthère Irénée du Pont's improvements in chemistry and gunpowder making, and other industrial advancements necessitated by the War of 1812, and construction of the Erie Canal, which was built between 1817 and 1821.
History
18th century As the United Kingdom industrialized in the mid-to-late 18th century, the United States remained agrarian with resource processing, gristmills, and sawmills being the main industrial non-agrarian output. During the colonial period, Britain sought to keep the Thirteen Colonies from industrializing and becoming competitors, intending for the American colonies to remain agrarian backwaters, providing Britain with raw materials like indigo and cotton. Notably, William Pitt the Elder said in 1770 "the colonies should not be permitted to manufacture so much as a horseshoe nail". As demand for U.S. resources increased, canals and railroads became important to the economic growth as transportation necessitated and the population was sparse, especially in areas where resources were being extracted such as the American frontier. This made it necessary to expand technological capabilities, which led to an Industrial Revolution in America as entrepreneurs and businesses competed with and learned from each other to develop better technology, fundamentally altering the U.S. economy. Some technologies that advanced the Industrial Revolution in the U.S. were appropriated from British designs by ambitious British entrepreneurs hoping to use the technology to create successful companies in the U.S.Taylor, George Rogers (1969). The Transportation Revolution, 1815–1860. .Chandler Jr., Alfred D. (1993). The Visible Hand: The Management Revolution in American Business. Belknap Press of Harvard University Press.
Much of the Industrial Revolution in the U.S. originated in the Lehigh Valley region of eastern Pennsylvania and New York City, NY, where anthracite coal, iron ore, steel, textile, and industrial sectors experienced breakthroughs and emerged as global manufacturing leaders.Industrial strength: Lehigh Valley region played crucial role in Industrial Revolution," Times News, September 14, 2020
One entrepreneur who is most associated with starting up the textile industry in the U.S. and who initially brought the textile technology to the U.S. was Samuel Slater. Slater learned that Americans were interested in textile techniques used in England, but since exporting such technical designs were illegal in England, he memorized as much as he could and departed for New York City. Moses Brown, a leading Rhode Island industrialist, secured the services of Slater, with Slater promising to recreate British textile designs. After an initial investment by Brown to fulfill initial requirements, the first water-powered roller spinning textile mill in America was opened in 1793. By 1800, Slater's mill had been duplicated by many other entrepreneurs as Slater grew wealthier and his techniques became more popular, with Andrew Jackson calling Slater the "Father of the American Industrial Revolution". But Slater also earned the pejorative "Slater the Traitor" from many in Great Britain who felt he betrayed them in bringing British textile techniques to the Americas.
With the invention of the cotton gin by Eli Whitney in 1794, American slaveholders had the means to make cotton production significantly more profitable. The era of King Cotton was underway by the early 19th century to such an extent that by the mid-19th century, southern slave plantations supplied 75% of the world's cotton. The introduction of the cotton gin was as unexpected as it was unprecedented. British textiles had expanded with no change in ginning principles in centuries. For the American planter class, upfront costs were higher, but productivity improvement among their slaves were clear, and Whitney's original 1794 gin design was copied by many and improved upon.TeachingAmericanHistory.org "Cotton is King" http://teachingamericanhistory.org/library/index.asp?document=1722 Effect of Eli Whitney's cotton gin on historic trends in cotton ginning https://aiimpacts.org/effect-of-eli-whitneys-cotton-gin-on-historic-trends-in-cotton-ginning/
The du Pont family emigrated to the United States during the French Revolution, bringing with them expertise in chemistry and gunpowder. E.I. du Pont observed that the quality of American gunpowder was poor, and in 1802 he opened the Eleutherian Mills powder mill in Wilmington, Delaware. The mill served as home for du Pont's family as well as a center of business and social life, with employees living at or near the mill. The company grew rapidly and by the mid-19th century had become the largest supplier of gunpowder to the United States military.Brown, G.I. (1998). The Big Bang: A History of Explosives. Thrupp: Sutton Publishing Limited. .
In the late 18th century, Robert Fulton of Pennsylvania proposed plans for steam-powered vessels to both the United States and British governments. Having developed significant technical knowledge in both France and Great Britain, Fulton returned to the United States, working with Robert R. Livingston to open the first commercially successful steamboat operating between New York City and Albany. Fulton built a steamboat sturdy enough to take down the Ohio and Mississippi rivers, he was an early member on a commission to plan the Erie Canal, and he designed the first working muscle-powered submarine, the Nautilus.
In the 1780s, the Erie Canal was proposed, then re-proposed in 1807 with a survey being funded in 1808. Construction began in 1817 and the original canal was about 363 miles with 34 numbered locks from Albany to Buffalo. Prior to the canal, bulk goods were limited to shipping by pack animal, there were no railways, and water became the most cost-effective way to ship bulk goods. Use of the canal was faster than using carts pulled by draft animals and cut transport costs by about 95%. The canal gave New York City's port a significant advantage over all other U.S. port cities and contributed to a growth in population in New York state and regions farther west."Works of Man", Ronald W. Clark, (1985), Viking Penguin, New York quotation: "There was little experience moving bulk loads by carts, while a packhorse would [i.e., "could"] carry only an eighth of a ton [(]. On a soft road, a horse might be able to draw ths of a ton [() or 5×]. But if the load were carried by a barge on a waterway, then up to 30 tons [( or ) or 240×] could be drawn by the same horse.""...A 95% reduction is probably conservative, 250 lb/30 t is 0.4% the expenses, so reduction to 5% costs still indicates someone is taking a lot of profits.' It inspired canals elsewhere, bringing a canal age.
Legislation In response to British aggression against the U.S., Congress passed the Embargo Act of 1807, which President Thomas Jefferson signed into law. The embargo was a cumulative addition to the Non-importation Act of 1806 (2 Stat. 379), which was a "Prohibition of the Importation of certain Goods and Merchandise from the Kingdom of Great Britain," the prohibited imported goods being defined where their chief value, which consists of leather, silk, hemp or flax, tin or brass, wool, glass, and paper goods, nails, hats, clothing, and beer.2 Stat. 379 (1806) Library of Congress, U.S. Congressional Documents and Debates, 1774–1875
The prohibition of imports under the Embargo Act resulted in the expansion of emerging U.S. domestic industries across the board, particularly the textile industry, and marked the beginning of the manufacturing system in the U.S., reducing dependence upon imported manufactured goods.Smith, Ryan P., 'A History of America’s Ever-Shifting Stance on Tariffs: Unpacking A Debate As Old As The United States Itself', Smithsonian Magazine, 18 April 2018, retrieved 5 April 2023Rantakari, Heikki, 'The Antebellum Tariff on Cotton Textiles 1816-1860: Consolidation', 4 April 2003, retrieved 5 April 2023
Tariffs According to economic historian Douglas Irwin, a common myth about U.S. trade policy is that low tariffs harmed American manufacturers in the early 19th century and then that high tariffs made the United States into a great industrial power in the late 19th century. As its share of global manufacturing powered from 23% in 1870 to 36% in 1913, the high tariffs of the time came with a cost, estimated at around 0.5% of GDP in the mid-1870s. In some industries, they might have sped up development by a few years. However, U.S. economic growth during its protectionist era was driven more by its abundant resources and openness to people and ideas. A 2026 study by Iriwin found that trade wars and embargoes during the start of the 19th century did not accelerate US industrialization.
Labor and finance
The early Industrial Revolution, which lasted into the mid-19th century, was marked by shift in labor, from an outwork system of labor towards a factory system. Throughout this period, much of the U.S. population remained in small scale agriculture. Despite a small percentage of the population working in industry, the U.S. government took action to promote the expansion of U.S. industry. Alexander Hamilton backed ideas from the "American School" of economics that supported high tariffs to protect U.S. industry. This idea was embraced by the Whig Party in the early 19th century with their support for Henry Clay's American System. This plan, proposed shortly after the War of 1812, promoted protective tariffs and also called for construction of canals and roads to support the movement of manufactured goods around the country. As in Britain, the First Industrial Revolution revolved heavily around the textile industry. Early U.S. textile plants were located next to rivers and streams as they would use the running water to power the machinery in the plant. Thus, many of the factories of the First Industrial Revolution were in the northeastern U.S.
To aid the expansion of industry, Congress chartered the Bank of the United States in 1791, giving loans to help merchants and entrepreneurs secure needed capital. However, Jeffersonians saw this bank as an unconstitutional expansion of federal power, so when its charter expired in 1811, the Jeffersonian-dominated Congress did not renew it. State legislatures were persuaded to charter their own banks to continue helping merchants, artisans, and farmers who needed loans, and by 1816 there were 246 state-chartered banks. With these banks, states were able to support internal transportation improvements such as the Erie Canal, which stimulated economic development.